Proceeding instituted by the Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts. The respondent was admitted to the Bar at a term of the Appellate Division of the Supreme Court in the Second Judicial Department on October 13, 1976. By decision and order of this Court dated July 18, 2007, the Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts was authorized to institute and prosecute a disciplinary proceeding against the respondent and the issues raised were referred to the Honorable Herbert A. Posner, as Special Referee to hear and report. By decision and order on motion of this Court dated September 26, 2007, the Honorable Herbert A. Posner was relieved as Special Referee and the Honorable James A. Gowan was assigned as Special Referee to hear and report.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
A. GAIL PRUDENTI, P.J., WILLIAM F. MASTRO, REINALDO E. RIVERA, ROBERT A. SPOLZINO and DANIEL D. ANGIOLILLO, JJ.
The Grievance Committee for the Second, Eleventh, and Thirteenth Judicial Districts (hereinafter the Grievance Committee) served the respondent with a petition dated September 27, 2007, which contains six charges of professional misconduct. After a hearing on December 12, 2007, Special Referee James A. Gowan sustained only part of Charge Six and failed to find any violations of the Disciplinary Rules with respect to the remaining charges. The Grievance Committee now moves to disaffirm the Special Referee's finding to the extent that he failed to sustain Charges One, Two, Three, Four, and Five and parts of Charge Six and to confirm solely to the extent that he sustained part of Charge Six. The respondent's counsel has submitted an affirmation in opposition to the Grievance Committee's application to disaffirm the Special Referee's report and in support of his request that the Court confirm the Special Referee's report in its entirety and impose such discipline as the Court deems just and proper.
Charge One alleges that the respondent provided inaccurate and misleading information to the Grievance Committee, in violation of Code of Professional Responsibility DRs 1-102(a)(4), (5) and (7) (22 NYCRR 1200.3[a],  and ).
The respondent maintained an attorney trust account (hereinafter IOLA) at J.P. Morgan Chase Bank (hereinafter Chase) which contained funds entrusted to him as a fiduciary incident to his practice of law. Pursuant to the Dishonored Check Reporting Rules for Attorney Special, Trust and Escrow Accounts (22 NYCRR Part 1300), the Lawyers' Fund for Client Protection forwarded to the Grievance Committee and the respondent a bank report showing that three checks in the amounts of $7,285.47, $596, and $505.53, were presented for payment on March 29, 2006, against insufficient or uncollected funds.
By letter dated May 4, 2006, the respondent forwarded to the Grievance Committee a letter from Chase dated May 3, 2006, which advised that due to an error in processing a deposit into the respondent's IOLA account, the deposit was not properly credited and an apparent insufficiency resulted on March 29, 2006. The deposit has since been corrected and the items presented were paid. At that time, the respondent knew that the alleged bank error referred to in the Chase letter was not the reason for the insufficiency in his IOLA account.
Charge Two alleges that the respondent provided inaccurate and misleading information to the Grievance Committee, in violation of Code of Professional Responsibility DRs 1-102(a)(4), (5), and (7) (22 NYCRR 1200.3[a], , ).
On March 29, 2006, a $10,000 deposit was made to the respondent's IOLA account. The ending daily balance in the respondent's IOLA on March 29, 2006, was $1,334.27. By letter dated June 28, 2006, the respondent advised the Grievance Committee that the $10,000 on deposit on March 29, 2006, was for his client Sciannantena and remained on deposit. He further advised that the three checks referred to in Charge One, which totaled $8,387, were issued on March 29, 2006, to pay settlement charges for the Djadowicz borrowers from funds received on March 17, 2006, totaling $138,500. According to the respondent, the ending balance of $1,334.27 in his IOLA as of March 29, 2006, belonged to client LoDispoto and remained on account. However, a portion of the three checks totaling $8,387 issued for the benefit of Djadowicz cleared against the $10,000 deposited for Sciannantena on March 29, 2006, thereby depleting that deposit.
The respondent knew or should have known that the IOLA account contained at least $10,000 earmarked for Sciannantena on March 29, 2006, while the ending balance in the IOLA on that date was only $1,334.27. Further, the respondent knew or should have known that the $1,334.27 in the IOLA on March 29, 2006, was not earmarked for LoDispoto but could have been attributed to any one of numerous clients for whom the respondent should have been holding funds in escrow. He knew or should have known that he should have been holding more than $1,334.27 in his IOLA account for LoDispoto on March 29, 2006.
Charge Three alleges that the respondent misappropriated funds held in his IOLA which were entrusted to him as a fiduciary incident to his practice of law, in violation of Code of Professional ...